2017 Q3 Form 10-K Financial Statement

#000008042017000032 Filed on December 06, 2017

View on sec.gov

Income Statement

Concept 2017 Q3 2016 Q3 2016 Q2
Revenue $94.96M $129.8M $133.2M
YoY Change -26.84% -20.02% -24.62%
Cost Of Revenue $84.10M $104.1M $105.9M
YoY Change -19.21% -21.37% -26.34%
Gross Profit $10.89M $25.68M $27.29M
YoY Change -57.57% -14.26% -17.18%
Gross Profit Margin 11.47% 19.78% 20.48%
Selling, General & Admin $15.10M $17.10M $19.36M
YoY Change -11.7% -7.57% 7.57%
% of Gross Profit 138.61% 66.6% 70.96%
Research & Development $2.100M $1.300M $1.640M
YoY Change 61.54% -31.58% 2.5%
% of Gross Profit 19.28% 5.06% 6.01%
Depreciation & Amortization $3.300M $3.300M $3.400M
YoY Change 0.0% 0.0% 0.0%
% of Gross Profit 30.29% 12.85% 12.46%
Operating Expenses $17.20M $18.60M $21.00M
YoY Change -7.53% -8.82% 6.07%
Operating Profit -$6.306M $7.076M $5.547M
YoY Change -189.12% -25.88% -57.8%
Interest Expense $200.0K $0.00 $38.00K
YoY Change
% of Operating Profit 0.0% 0.69%
Other Income/Expense, Net $500.0K $500.0K $507.0K
YoY Change 0.0% 0.0% 1.4%
Pretax Income -$6.100M $6.900M $6.058M
YoY Change -188.41% -25.81% -50.48%
Income Tax -$1.000M $1.400M $1.164M
% Of Pretax Income 20.29% 19.21%
Net Earnings -$5.142M $5.508M $4.894M
YoY Change -193.36% -12.74% -30.57%
Net Earnings / Revenue -5.41% 4.24% 3.67%
Basic Earnings Per Share -$0.45 $0.48 $0.43
Diluted Earnings Per Share -$0.45 $0.48 $0.43
COMMON SHARES
Basic Shares Outstanding 11.43M shares 11.40M shares
Diluted Shares Outstanding 11.47M shares

Balance Sheet

Concept 2017 Q3 2016 Q3 2016 Q2
SHORT-TERM ASSETS
Cash & Short-Term Investments $95.20M $97.70M $89.40M
YoY Change -2.56% 124.08% 41.01%
Cash & Equivalents $68.36M $97.72M $89.35M
Short-Term Investments $26.80M
Other Short-Term Assets $463.0K $2.457M $10.70M
YoY Change -81.16% -37.26% -21.9%
Inventory $18.45M $26.52M $108.2M
Prepaid Expenses $3.701M $4.569M
Receivables $53.85M $101.0M $87.90M
Other Receivables $8.200M $1.800M $2.800M
Total Short-Term Assets $250.1M $304.1M $299.0M
YoY Change -17.78% 2.37% -7.57%
LONG-TERM ASSETS
Property, Plant & Equipment $139.4M $145.0M $147.8M
YoY Change -3.83% -6.22% -8.93%
Goodwill $1.000M $1.003M
YoY Change
Intangibles
YoY Change
Long-Term Investments
YoY Change
Other Assets $13.80M $11.34M $11.50M
YoY Change 21.69% -8.55% -10.16%
Total Long-Term Assets $164.9M $158.4M $161.4M
YoY Change 4.13% -7.77% -10.28%
TOTAL ASSETS
Total Short-Term Assets $250.1M $304.1M $299.0M
Total Long-Term Assets $164.9M $158.4M $161.4M
Total Assets $415.0M $462.5M $460.4M
YoY Change -10.28% -1.35% -8.54%
SHORT-TERM LIABILITIES
YoY Change
Accounts Payable $33.27M $34.99M $35.93M
YoY Change -4.9% -27.13% -33.84%
Accrued Expenses $18.20M $27.20M $27.60M
YoY Change -33.09% 12.4% 20.0%
Deferred Revenue
YoY Change
Short-Term Debt $0.00 $0.00 $0.00
YoY Change
Long-Term Debt Due $400.0K $400.0K $400.0K
YoY Change 0.0% 0.0% 0.0%
Total Short-Term Liabilities $85.58M $118.2M $116.4M
YoY Change -27.63% -5.4% -20.47%
LONG-TERM LIABILITIES
Long-Term Debt $1.600M $2.000M $2.000M
YoY Change -20.0% -16.67% -16.67%
Other Long-Term Liabilities $1.197M $1.466M $792.0K
YoY Change -18.35% 102.77% -91.2%
Total Long-Term Liabilities $2.797M $3.466M $2.792M
YoY Change -19.3% 10.98% -75.51%
TOTAL LIABILITIES
Total Short-Term Liabilities $85.58M $118.2M $116.4M
Total Long-Term Liabilities $2.797M $3.466M $2.792M
Total Liabilities $93.69M $127.2M $125.8M
YoY Change -26.34% -6.2% -20.28%
SHAREHOLDERS EQUITY
Retained Earnings $310.6M $332.0M $329.4M
YoY Change -6.43%
Common Stock $54.33M $52.00M $51.74M
YoY Change 4.47%
Preferred Stock
YoY Change
Treasury Stock (at cost) $25.00M $25.00M $25.00M
YoY Change 0.0% 17.59% 99.62%
Treasury Stock Shares 806.0K shares 806.0K shares $806.0K
Shareholders Equity $321.3M $335.3M $334.6M
YoY Change
Total Liabilities & Shareholders Equity $415.0M $462.5M $460.4M
YoY Change -10.28% -1.34% -8.55%

Cashflow Statement

Concept 2017 Q3 2016 Q3 2016 Q2
OPERATING ACTIVITIES
Net Income -$5.142M $5.508M $4.894M
YoY Change -193.36% -12.74% -30.57%
Depreciation, Depletion And Amortization $3.300M $3.300M $3.400M
YoY Change 0.0% 0.0% 0.0%
Cash From Operating Activities $9.700M $13.10M $36.60M
YoY Change -25.95% -329.82% 61.23%
INVESTING ACTIVITIES
Capital Expenditures -$1.100M -$1.000M -$900.0K
YoY Change 10.0% 100.0% -83.64%
Acquisitions
YoY Change
Other Investing Activities $29.00M $100.0K $100.0K
YoY Change 28900.0% 0.0%
Cash From Investing Activities $27.90M -$1.000M -$800.0K
YoY Change -2890.0% 150.0% -85.71%
FINANCING ACTIVITIES
Cash Dividend Paid
YoY Change
Common Stock Issuance & Retirement, Net
YoY Change
Debt Paid & Issued, Net
YoY Change
Cash From Financing Activities -3.000M -3.400M -3.100M
YoY Change -11.76% -71.9% -68.37%
NET CHANGE
Cash From Operating Activities 9.700M 13.10M 36.60M
Cash From Investing Activities 27.90M -1.000M -800.0K
Cash From Financing Activities -3.000M -3.400M -3.100M
Net Change In Cash 34.60M 8.700M 32.70M
YoY Change 297.7% -147.8% 347.95%
FREE CASH FLOW
Cash From Operating Activities $9.700M $13.10M $36.60M
Capital Expenditures -$1.100M -$1.000M -$900.0K
Free Cash Flow $10.80M $14.10M $37.50M
YoY Change -23.4% -371.15% 32.98%

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DeferredIncomeTaxExpenseBenefit
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507000 USD
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420000 USD
CY2016 us-gaap Deferred State And Local Income Tax Expense Benefit
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345000 USD
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64000 USD
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3978000 USD
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229000 USD
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11823000 USD
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171000 USD
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44000 USD
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1292000 USD
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3258000 USD
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1679000 USD
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1208000 USD
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1853000 USD
CY2017Q3 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Pensions
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2009000 USD
CY2016Q3 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Postretirement Benefits
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503000 USD
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264000 USD
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760000 USD
CY2017Q3 us-gaap Deferred Tax Assets Tax Deferred Expense Compensation And Benefits Share Based Compensation Cost
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1094000 USD
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220000 USD
CY2017Q3 us-gaap Deferred Tax Assets Tax Deferred Expense Reserves And Accruals Allowance For Doubtful Accounts
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14000 USD
CY2016Q3 us-gaap Deferred Tax Assets Tax Deferred Expense Reserves And Accruals Legal Settlements
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294000 USD
CY2017Q3 us-gaap Deferred Tax Assets Tax Deferred Expense Reserves And Accruals Legal Settlements
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435000 USD
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1388000 USD
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892000 USD
CY2016Q3 us-gaap Deferred Tax Assets Valuation Allowance
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8439000 USD
CY2017Q3 us-gaap Deferred Tax Assets Valuation Allowance
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8800000 USD
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378000 USD
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439000 USD
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16308000 USD
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18330000 USD
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138000 USD
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0 USD
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5900000 USD
CY2016 us-gaap Defined Contribution Plan Cost Recognized
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3900000 USD
CY2017 us-gaap Defined Contribution Plan Cost Recognized
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2800000 USD
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CY2017 us-gaap Earnings Per Share Diluted
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CY2015 us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
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CY2016 us-gaap Effect Of Exchange Rate On Cash And Cash Equivalents
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CY2016 us-gaap Effective Income Tax Rate Continuing Operations
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0.13
CY2017 us-gaap Effective Income Tax Rate Continuing Operations
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0.44
CY2015 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
CY2016 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
CY2017 us-gaap Effective Income Tax Rate Reconciliation At Federal Statutory Income Tax Rate
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0.35
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0.03
CY2016 us-gaap Effective Income Tax Rate Reconciliation Deductions Qualified Production Activities
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0.00
CY2017 us-gaap Effective Income Tax Rate Reconciliation Deductions Qualified Production Activities
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0.00
CY2015 us-gaap Effective Income Tax Rate Reconciliation Foreign Income Tax Rate Differential
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0.04
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-0.08
CY2017 us-gaap Effective Income Tax Rate Reconciliation Foreign Income Tax Rate Differential
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0.02
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-0.02
CY2016 us-gaap Effective Income Tax Rate Reconciliation Other Reconciling Items Percent
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0.03
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-0.02
CY2015 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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0.03
CY2016 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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0.02
CY2017 us-gaap Effective Income Tax Rate Reconciliation State And Local Income Taxes
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0.02
CY2015 us-gaap Effective Income Tax Rate Reconciliation Tax Credits Research
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0.21
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0.08
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14984000 USD
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CY2017 us-gaap Excess Tax Benefit From Share Based Compensation Financing Activities
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0 USD
CY2015 us-gaap Excess Tax Benefit From Share Based Compensation Operating Activities
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-191000 USD
CY2016 us-gaap Excess Tax Benefit From Share Based Compensation Operating Activities
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-387000 USD
CY2017 us-gaap Excess Tax Benefit From Share Based Compensation Operating Activities
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0 USD
CY2017Q3 us-gaap Finite Lived Intangible Assets Amortization Expense Next Twelve Months
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204000 USD
CY2017Q3 us-gaap Finite Lived Intangible Assets Amortization Expense Year Five
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0 USD
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160000 USD
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176000 USD
CY2017Q3 us-gaap Finite Lived Intangible Assets Amortization Expense Year Two
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176000 USD
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P4Y
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2029000 USD
CY2016 us-gaap Gain Loss On Disposition Of Intangible Assets
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2029000 USD
CY2017 us-gaap Gain Loss On Disposition Of Intangible Assets
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2029000 USD
CY2017Q3 us-gaap Goodwill
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0 USD
CY2016 us-gaap Goodwill Impairment Loss
GoodwillImpairmentLoss
0 USD
CY2017 us-gaap Goodwill Impairment Loss
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33549000 USD
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5087000 USD
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22991000 USD
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17793000 USD
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-16919000 USD
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3013000 USD
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2283000 USD
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2298000 USD
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-1647000 USD
CY2016 us-gaap Increase Decrease In Accrued Income Taxes Payable
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-195000 USD
CY2017 us-gaap Increase Decrease In Accrued Income Taxes Payable
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CY2015 us-gaap Increase Decrease In Accrued Liabilities
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3927000 USD
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CY2015 us-gaap Increase Decrease In Inventories
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572000 USD
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833000 USD
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1101000 USD
CY2017 us-gaap Increase Decrease In Other Operating Capital Net
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1950000 USD
CY2015 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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-4222000 USD
CY2016 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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-861000 USD
CY2017 us-gaap Increase Decrease In Prepaid Deferred Expense And Other Assets
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-453000 USD
CY2015 us-gaap Increase Decrease In Unbilled Receivables
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17430000 USD
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CY2017 us-gaap Increase Decrease In Unbilled Receivables
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3270000 USD
CY2015 us-gaap Increase In Restricted Cash
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0 USD
CY2016 us-gaap Increase In Restricted Cash
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0 USD
CY2017 us-gaap Increase In Restricted Cash
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24851000 USD
CY2015 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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39000 shares
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31000 shares
CY2017 us-gaap Incremental Common Shares Attributable To Share Based Payment Arrangements
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0 shares
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1719000 USD
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InterestExpense
145000 USD
CY2016 us-gaap Interest Expense
InterestExpense
149000 USD
CY2017 us-gaap Interest Expense
InterestExpense
168000 USD
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26521000 USD
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18448000 USD
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29639000 USD
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22100000 USD
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4114000 USD
CY2017Q3 us-gaap Inventory Valuation Reserves
InventoryValuationReserves
4252000 USD
CY2016Q3 us-gaap Inventory Work In Process
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996000 USD
CY2017Q3 us-gaap Inventory Work In Process
InventoryWorkInProcess
600000 USD
CY2015 us-gaap Investment Income Interest
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86000 USD
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InvestmentIncomeInterest
156000 USD
CY2017 us-gaap Investment Income Interest
InvestmentIncomeInterest
558000 USD
CY2016Q3 us-gaap Liabilities
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127199000 USD
CY2017Q3 us-gaap Liabilities
Liabilities
93690000 USD
CY2016Q3 us-gaap Liabilities And Stockholders Equity
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462516000 USD
CY2017Q3 us-gaap Liabilities And Stockholders Equity
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414986000 USD
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118248000 USD
CY2017Q3 us-gaap Liabilities Current
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85579000 USD
CY2016Q3 us-gaap Long Term Debt
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2400000 USD
CY2017Q3 us-gaap Long Term Debt
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2000000 USD
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400000 USD
CY2016Q3 us-gaap Long Term Debt Current
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400000 USD
CY2017Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Next Twelve Months
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400000 USD
CY2017Q3 us-gaap Long Term Debt Current
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400000 USD
CY2016Q3 us-gaap Long Term Debt And Capital Lease Obligations
LongTermDebtAndCapitalLeaseObligations
2000000 USD
CY2017Q3 us-gaap Long Term Debt And Capital Lease Obligations
LongTermDebtAndCapitalLeaseObligations
1600000 USD
CY2016Q3 us-gaap Long Term Debt And Capital Lease Obligations Current
LongTermDebtAndCapitalLeaseObligationsCurrent
400000 USD
CY2017Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Five
LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFive
400000 USD
CY2017Q3 us-gaap Long Term Debt Maturities Repayments Of Principal In Year Four
LongTermDebtMaturitiesRepaymentsOfPrincipalInYearFour
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CY2017 us-gaap Nature Of Operations
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<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-weight:bold;">Business and Organization</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Powell Industries, Inc. (we, us, our, Powell or the Company) was incorporated in the state of Delaware in 2004 as a successor to a Nevada company incorporated in 1968. The Nevada company was the successor to a company founded by William E. Powell in 1947, which merged into the Company in 1977. Our major subsidiaries, all of which are wholly owned, include: Powell Electrical Systems, Inc.; Powell (UK) Limited; Powell Canada Inc. and Powell Industries International, B.V.</font></div><div style="line-height:120%;padding-top:16px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">We develop, design, manufacture and service custom-engineered equipment and systems for the distribution, control and monitoring of electrical energy designed to (1) distribute, control and monitor the flow of electrical energy and (2) provide protection to motors, transformers and other electrically powered equipment. Our principal products include integrated power control room substations (PCRs&#174;), custom-engineered modules, electrical houses (E-Houses), traditional and arc-resistant distribution switchgear and control gear, medium-voltage circuit breakers, monitoring and control communications systems, motor control centers and bus duct systems. These products are designed for application voltages ranging from </font><font style="font-family:inherit;font-size:10pt;">480</font><font style="font-family:inherit;font-size:10pt;"> volts to </font><font style="font-family:inherit;font-size:10pt;">38,000</font><font style="font-family:inherit;font-size:10pt;"> volts and are used in oil and gas refining, offshore oil and gas production, petrochemical, pipeline, terminal, mining and metals, light rail traction power, electric utility, pulp and paper and other heavy industrial markets. Our product scope includes designs tested to meet both U.S.&#160;standards (ANSI) and international standards (IEC). We assist customers by providing value-added services such as spare parts, field service inspection, installation, commissioning, modification and repair, retrofit and retrofill components for existing systems and replacement circuit breakers for switchgear that is obsolete or that is no longer produced by the original manufacturer. We seek to establish long-term relationships with the end users of our systems as well as the design and construction engineering firms contracted by those end users.</font></div><div style="line-height:120%;padding-top:16px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">References to Fiscal </font><font style="font-family:inherit;font-size:10pt;">2017</font><font style="font-family:inherit;font-size:10pt;">, Fiscal </font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;"> and Fiscal </font><font style="font-family:inherit;font-size:10pt;">2015</font><font style="font-family:inherit;font-size:10pt;"> used throughout these Notes to Consolidated Financial Statements relate to our fiscal years ended </font><font style="font-family:inherit;font-size:10pt;">September&#160;30, 2017</font><font style="font-family:inherit;font-size:10pt;">, </font><font style="font-family:inherit;font-size:10pt;">2016</font><font style="font-family:inherit;font-size:10pt;"> and </font><font style="font-family:inherit;font-size:10pt;">2015</font><font style="font-family:inherit;font-size:10pt;">, respectively.</font></div></div>
CY2017 us-gaap Revenue Recognition Accounting Policy Gross And Net Revenue Disclosure
RevenueRecognitionAccountingPolicyGrossAndNetRevenueDisclosure
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Revenue Recognition</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Our revenues are primarily generated from the engineering and manufacturing of custom products under long-term contracts that may last from </font><font style="font-family:inherit;font-size:10pt;">one</font><font style="font-family:inherit;font-size:10pt;"> month to several years, depending on the contract. Revenues from long-term contracts are recognized on the percentage-of-completion method of accounting. Occasionally a contract may require that we segment the project into specific deliverables for revenue recognition. Segmenting a contract may result in different interim rates of profitability for each scope of service than if we had recognized revenue on a combined basis.</font></div><div style="line-height:120%;padding-top:16px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Under the percentage-of-completion method of accounting, revenues are recognized as work is performed. The revenue earned to date is calculated by multiplying the total contract price by the percentage of performance to date, which is based on total costs or total labor dollars incurred to date compared to the total estimated costs or total labor dollars estimated at completion. The method used to determine the percentage of completion is typically the cost method, unless the labor method is a more accurate method of measuring the progress of the project. Application of the percentage-of-completion method of accounting requires the use of estimates of costs to be incurred for the performance of the contract. Contract costs include all direct material costs, direct labor costs and those indirect costs related to contract performance, such as indirect labor, supplies, tools, repairs and all costs associated with operation of equipment. The cost estimation process is based upon the professional knowledge and experience of our engineers, project managers and financial professionals. Factors that are considered in estimating the work to be completed and ultimate contract recovery include the availability and productivity of labor, the nature and complexity of the work to be performed, the effect of change orders, the availability of materials, the effect of any delays on our project performance and the recoverability of any claims. Changes in job performance, job conditions, estimated profitability and final contract settlements, including our estimate of liquidated damages, if any, may result in revisions to costs and income, with their effects being recognized in the period in which the revisions are determined. Whenever revisions of estimated contract costs and contract values indicate that the contract costs will exceed estimated revenues, thus creating a loss, a provision for the total estimated loss is recorded in that period.</font></div><div style="line-height:120%;padding-top:16px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">Revenues associated with maintenance, repair and service contracts are recognized when the services are performed. Expenses related to these types of services are recognized as incurred.</font></div></div>
CY2017 us-gaap Use Of Estimates
UseOfEstimates
<div style="font-family:Times New Roman;font-size:10pt;"><div style="line-height:120%;padding-top:24px;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;font-style:italic;font-weight:bold;">Use of Estimates</font></div><div style="line-height:120%;padding-top:8px;text-align:justify;font-size:10pt;"><font style="font-family:inherit;font-size:10pt;">The preparation of financial statements in conformity with accounting principles generally accepted in the United States (U.S.&#160;GAAP) requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying footnotes. The most significant estimates used in our financial statements affect revenue and cost recognition for construction contracts, the allowance for doubtful accounts, provision for excess and obsolete inventory, warranty accruals and income taxes. The amounts recorded for warranties, legal, income taxes, impairment of long-lived assets (when applicable) and other contingent liabilities require judgments regarding the amount of expenses that will ultimately be incurred. We base our estimates on historical experience and on various other assumptions, as well as the specific circumstances surrounding these contingent liabilities, in evaluating the amount of liability that should be recorded. Additionally, the recognition of deferred tax assets requires estimates related to future income and other assumptions regarding timing and future profitability.&#160;Estimates may change as new events occur, additional information becomes available or operating environments change. Actual results may differ from our estimates.</font></div></div>

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